Steps toward a Better Year in 1992 THE GLOBAL ECONOMY

Article excerpt

THIS is the time of year when nations, no less than individuals, should take stock of accomplishments and failures and set their sights to the future. What most troubles Americans today is the sorry state of the United States economy. In an increasingly interdependent world, that is reason enough to be concerned about how we manage our global economic affairs.

Here are 10 ways that we can do better in 1992.

1. Stop blaming others for our problems. Japan did not cause our recession. We should press Japan to open its markets, but mainly we have to get tough with ourselves.

2. Even better, stop thinking in terms of "them and us." Smart strategies of bargaining and cooperation - not confrontation - work best in promoting economic interests. A prosperous Europe and Japan mean more markets for US products and more jobs for American workers.

3. Stop dithering and get on with basic economic reforms. Shrinking our budget deficit may be difficult, but eventually it is the only way to shrink our trade deficit. We also need to spend more to increase our international competitiveness - by rebuilding our schools, rehabilitating our deteriorated physical infrastructure, and improving our health-care delivery. That means more taxes, not less.

4. Don't get hung up on ideology. The free market is usually the most efficient way to allocate resources and produce goods, but markets are not good at educating the young, caring for the old, building roads, keeping the environment clean, or preventing S&L disasters. Those tasks must fall to governments.

5. Recognize that economics is now the driving force of US foreign policy. Economic strength has become more important than military force. The value of American exports counts more than the throw-weight of our missiles. In the post-cold-war era, the Departments of Commerce and Treasury should often have more to say about international negotiations than State and Defense.

6. Push hard for agreements to liberalize trade. Next year will be decisive for two crucial sets of negotiations: the Uruguay Round of the General Agreement on Trade and Tariffs (GATT), which governs most global commerce, and the North American free-trade agreement (NAFTA), which will ease trade barriers among Canada, Mexico, and the US. Failure to satisfactorily conclude the GATT talks could set the world on a downward spiral of market closing and trade conflicts that would cost every country dearly. …

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